Friday, March 4, 2011

Under The Economic Crisis, China’s Software Outsourcing Industry, Where To Go From Here?


The global financial tsunami, so that the U.S. financial industry on Wall Street plunged into an unprecedented crisis, the five major investment banks collapse one after another, the financial sector have started layoffs and pay cuts. Is highly dependent on the U.S. and European financial services needs of the global offshore outsourcing industry, has also been a serious blow.

January 14, 2009, the world-renowned consulting firm McKinsey published data, the global offshore outsourcing of production in 2007 reached 60 billion U.S. dollars, while China accounted for only less than 10% of the overall market share.

In addition, in January 2008 to September, the financial sector for more than 20 million U.S. dollars worth of large outsourcing contracts increased from 130 down to about 100 copies, the total contract value fell from 18 billion U.S. dollars to 11 billion U.S. dollars.

As a global service outsourcing market participants, China’s software outsourcing industry has also suffered a serious blow. According to McKinsey, China’s 14 cities in 75 software and IT services company, as well as a number of Chinese government officials and China’s service outsourcing park manager interviews show that China’s service outsourcing industry growth rate is still not fast enough.

Impeding the development of China’s service outsourcing industry, the cause? In the context of the global financial crisis, the domestic service outsourcing industry, how should they respond? Under attack in the real economy, IT spending to reduce the software orders compression, yuan appreciation, software exports under pressure of the special period, give the plight of China’s software industry has brought about development opportunities and do?

At present, China’s service outsourcing industry, carriers formed a “three clusters” (the Bohai industrial clusters, industrial clusters Yangtze River Delta, Pearl River Delta industrial clusters), “East map” (the central and western areas and the eastern three clusters play their respective advantages and cooperate with ) pattern. As a key state-supported service outsourcing base cities, Chongqing, Chengdu, Xi’an, Wuhan has a strong policy support, a wealth of information technology professionals and competitive cost structure, is the development of service outsourcing industry, inland areas with the most potential and advantages lies. However, the global management consultant AT Kearney vice president Zhang heavenly view, the central and western development of software outsourcing software outsourcing business and the coastal cities compared to inland cities do not have the language advantage. Dalian has a large number of people proficient in Japanese, so you can focus on to the development of software outsourcing; Shenzhen Cantonese advantage because you can get from Hong Kong and Macao regions of secondary software outsourcing from Europe and the United States transfer of orders, while the central and western cities do not have these advantages. In this regard, the central and western cities on the one hand to strengthen the mastery of the 12 foreign language software, training of personnel and the introduction of work, while at the same external demand and domestic demand, orders will be combined to form a Midwestern characteristics of offshore outsourcing and onshore industrial structure of outsourcing go hand in hand.

In addition, there are also a number of key issues continue to hamper the industry and greater development. First of all, the industry remains highly fragmented pattern of submissions. China has not yet appeared to reach a certain scale (and service outsourcing revenues over one billion U.S. dollars) in business. The lack of industry with the world’s leading enterprise-scale comparable to large-scale enterprises can not effectively access to value, especially in large outsourcing and integration projects, or in need of scale in areas such as infrastructure outsourcing. This is exactly why China in the global service outsourcing areas of less well-known one of the main.

Second, compared to other, more well-known service outsourcing destinations, China is still a lack of a clear value proposition. IT decision-makers often referred to multinational companies in China do not understand the successful implementation of large-scale service outsourcing project successful precedent, and have always been more suitable for China as a global manufacturing center, rather than the emerging concept of service outsourcing powers. At the same time, for the potential risks of outsourcing in China there are also a considerable degree of misunderstanding, such as China’s IPR protection problems.

Third, the potential contracting companies do not generate enough demand to promote the growth of domestic service providers. McKinsey surveyed the software and service outsourcing enterprises, 51% pointed out that domestic customers would like to control the key business support functions within the enterprise the habit of thinking is that these companies do not outsource more business in the first place. As a result, the domestic market has not formed a strong domestic growth of service outsourcing enterprises pillar, or to international service providers, the great attraction.

Despite the financial crisis on the service outsourcing industry may be short-term negative impact, but China’s service outsourcing enterprises, the midst of the crisis bears more opportunities. It is understood that six major financial institutions in the United States in five intends to continue to maintain or expand within the next 6-12 months, service outsourcing and offshore programs.

The current financial crisis in many developed countries have a high-quality technology and client network information services company drop in asset prices, in order to have sufficient funds, while strategy can produce synergy of Chinese enterprises with more opportunities for potential acquisitions. Open global markets, as China’s software and service outsourcing enterprises is key to achieving growth targets, the Chinese market will expand and deepen the global business portfolio opportunities. China’s service providers with international service providers form a strategic alliance relationship to domestic customers by providing international partners to introduce new service capabilities.

Moreover, with the development of the global financial crisis, there will be familiar with the international market, customers, possess a wealth of industry experience, professionals will be looking for further career development opportunities, in addition to emerging economies such as China powers the prospect of excellent enterprises, if the Enterprises can create a suitable working environment – including a competitive salary, can be promoted to senior positions in the career development path and inclusive diversity, corporate culture, you can attract more outsourcing in developed countries experienced professionals to join China’s enterprises.

China is in the development of service outsourcing industry, a key crossroads, despite many challenges, but as long to grasp the opportunity, there is still opportunity to create brilliant.

from: http://maxi-pulsa.com/under-the-economic-crisis-chinas-software-outsourcing-industry-where-to-go-from-here/

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